While corporations appear to be in solid growth mode, a recent study by Bankrate shows that majority of Americans don’t have enough money saved to pay their bills for 6 months if they were to encounter an emergency. The survey questioned 1,004 people, asking a range of questions to determine their financial security. Only 24 percent of the respondents claimed to have enough money to cover their bills for the next six months in case of an emergency; 27 percent said they didn’t have any savings at all; 23 percent said they had some but less than 3 months, and 21 percent said they had three to five months worth of savings.
This survey exposes a larger trend that is occurring in the economy. Corporate profits are higher than they have ever been. The largest corporations are sitting on trillions of dollars worth of reserves yet their employees are strapped for cash and many don’t even receive benefits. With the growth in “temp” workers, persistent levels of unemployment and stagnant wages, Americans are finding it more difficult to get ahead.
During the same time that workers’ profits have remain stagnant, labor productivity– increase in goods and services—has increased. Worker productivity grew by 62.5 percent from 1989 to 2010, while wages for both private and government workers grew at 12 percent. From 1979 to 2009, productivity went up by 80 percent, while the meager wage increases during 1996-2002 reflected the strong economy at the time. Even during the time of “prosperity,” wage workers still didn’t receive a large share of the income growth. The top 1 percent between 1989 and 2007, before the recession, saw their income rise by 56 percent compared to 16 percent of the bottom 90 percent. According to Economic Policy Institute:
“…economic policy has not supported good jobs over the last 30 years or so. Rather, the focus has been on policies that were thought to make consumers better off through lower prices: deregulation of industries, privatization of public services, the weakening of labor standards including the minimum wage, erosion of the social safety net, expanding globalization, and the move toward fewer and weaker unions. These policies have served to erode the bargaining power of most workers, widen wage inequality, and deplete access to good jobs.”
During the “recovery,” the top 1 percent’s wages grew by 8.2 percent from 2009-2011. Meanwhile, the annual wages of the bottom 90 percent have continued to decline during the same period, decreasing by 1.2 percent. Corporations have recorded sky-high profits and continue to pay their employees less, thus exacerbating the income inequality. This underscores the Bankrate study showing that Americans aren’t ready for an emergency due to lack of savings. The majority of Americans are, in fact, living check to check.
The numbers expressed above prove that the middle class isn’t in a recovery. The only people in a “recovery” are the top 1 percent. Middle class wage earners continue to struggle as they return to work, but to jobs that pay less. Lower wage occupations accounted for 21 percent of the losses during the recession, but account for 58 percent of the growth. Middle wage occupations accounted for 60 percent of the losses, but 22 percent of job growth post recession.
Middle class workers have received the brunt of the burden during this, supposed, economic recovery, while the top 1 percent continue to live comfortably. It is difficult to sympathize with the “job-creators” in light of these facts. The middle class has become the working poor, while the working poor have become… poor. The laborer has truly become an economic pawn amidst the debate of creating “competitive businesses.”
There is no need for businesses to provide competitive wages or benefits since they are all providing the same meager incentives. Republicans and corporate elitists love to say that tax cuts at the top will create more profits thus lending them an incentive to hire more. However, there are no mentions of the incentives for the poor who continue slaving for corporate raiders. One thing Americans need to understand: corporations aren’t job creators. They are wealth usurpers. Corporations’ sole motive is to create profits; if they could do so without hiring a single person they would.